Revamping farm insurance

New proposals may do more harm than good

The package of measures announced by the government to revamp its flagship crop insurance scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY), may do more harm than good to this vital risk-hedging mechanism for farmers. No doubt, the package is not bereft of elements that may benefit the farmers, but many other mooted modifications in the format of the scheme are unlikely to go down well with insurance companies or the state governments.
 
On the upside, crop insurance has been made voluntary for all farmers. At present, it is mandatory for those who take bank loans and optional for